Eveready Industries has drawn a line under its promoter-lending past: the old inter-corporate deposits and a capital advance were fully written off in FY2021, and no new related-party loans have been made since. The audit opinion has been clean for five straight years. Three things still demand attention, an eight-year-old ₹171.55 crore competition penalty that remains unprovided, a ₹105 crore land-sale gain in FY26 that was shielded from tax by those old write-offs, and a board where one non-executive director’s pay repeatedly breaches statutory limits.
Key findings
- A ₹171.55 crore CCI penalty from 2018 remains unresolved and unprovided
Major- The Competition Commission imposed the penalty on 19 April 2018; NCLAT stayed it on 9 May 2018 on deposit of 10%, or ₹17.155 crore. The company has made no provision, carrying it as a contingent liability in every annual report through FY2025-26. The auditor has included an Emphasis of Matter paragraph on this penalty in the standalone audit report for FY2025-26. - A ₹105 crore land-sale gain was shielded from tax by old ICD write-offs, while MAT credit recognition reversed a multi-year stance
Major- A net profit of ₹105.2 crore was booked as an exceptional item on the 30 March 2026 transfer of Noida leasehold rights. Management stated that the \~₹500 crore ICD write-off created a business loss that offset the gain, resulting in zero tax on the sale. In the same year the company recognised a deferred tax asset of ₹85.09 crore for MAT credit it had previously declined to book due to uncertainty over future taxable income. - Audit opinions have been clean since FY2021-22, but the CCI penalty persists as a recurring Emphasis of Matter
Major- Singhi & Co. disclaimed its opinion on FY2019-20 and on the Q3 FY2021 unaudited results, citing the promoter-group exposures. From FY2021-22 through FY2025-26, every standalone and consolidated audit report has been unqualified. Every audit report from FY2020-21 through FY2025-26 carries an Emphasis of Matter on the unresolved ₹171.55 crore CCI penalty. - Revenue recognition is a recurring Key Audit Matter, but customer concentration is absent and receivables ageing is tight
Minor- Estimation of discounts, incentives, and warranty provisions has been flagged as a Key Audit Matter, an area requiring the most judgement, in every annual report since FY2020-21. No single customer accounted for 10% or more of revenue in any of those years. Trade receivables past 120 days are fully provided for, and maximum credit exposure to customers was ₹8.43 crore as at March 2026.
What to watch
- CCI penalty appeal. The appeal against the ₹171.55 crore penalty has been pending before NCLAT since May 2018, with no scheduled hearing date disclosed in the FY2025-26 annual report.
- Legacy impaired recoverables. ₹487.29 crore of loans and recoverables from four promoter-linked entities remain fully impaired, with no resolution date as of the FY2025-26 annual report.
- Director remuneration vote. Shareholders will vote on Mr. Arjun Lamba’s commission of up to ₹3.00 crore per annum for three years from 1 April 2026 at the forthcoming AGM.
- MAT credit utilisation. The ₹85.09 crore MAT credit recognised in FY26 will be drawn down at only 25% per year once carryforward business losses are exhausted, per management.
- Tax regime transition. Management has stated the company will adopt the 22% concessional tax regime under Section 115BAA from FY27, subject to utilisation of existing business losses.
Bottom line: This is a company that has credibly stopped the bleeding, no new promoter loans in five years, clean audit opinions, and a simple subsidiary structure. The record is not yet clean. An eight-year-old ₹171.55 crore penalty sits unresolved on the balance sheet as a contingent liability, the FY26 profit was shaped by a tax-shielded land sale and a one-time MAT credit recognition, and board pay keeps testing statutory limits. Watch the CCI appeal and the shareholder vote on director remuneration.